The refrigerator effect: How to utilize the performance of Direct Mails
Direct mails are becoming more relevant for the design of the media mix (once again), because they offer decisive advantages. The possibilities of modern digital printing, Direct Mail Automation software and the use of data and artificial intelligence allow to manage direct mails like a performance channel.
If you then manage to generate so much relevance with your direct mail campaign that your self-mailer or postcard is kept in the home, e.g. on the refrigerator door, instead of ending up directly in the wastebasket, you have exploited the potential of Direct Mail. The prerequisite is that different channels play together like an orchestra – or as Jatin K. Pandey, Vice President – Head of CRM at ESPRIT says:
It’s not about one sales channel. It’s about the experience you’re giving to the customer.
Jatin K. Pandey
Vice President – Head of CRM, Esprit
The refrigerator effect: creating relevance at your customers
Everyone of us knows this scenario: There is a classic envelope from a not immediately obvious sender and a colorful advertising booklet from some supermarket in the mailbox. Next to most mailboxes is a wastebasket. Which of the two print formats do you think will end up in it? After a quick glance probably the interchangeable advertising booklet. The envelope on the other hand is taken along and opened.
Inside is a personal letter from a company you know. The company congratulates you on your upcoming birthday and gives you a gift voucher that you can redeem online and offline. You are happy about the mailing and the little attention. So that it is not forgotten you pin the letter to your refrigerator.
Congratulations, you created the refrigerator effect! Not only have you created surprise and attention among your customers, but your Direct Mail has also conquered a touchpoint that is passed multiple times every day: the refrigerator. If it’s not the refrigerator, every person or home has a place where they keep things that they want to remember in some way. They are places we pass by several times a day, whether it’s the desk, the sideboard in the hallway, or even the refrigerator.
Best Practice: Happy Birthday by ESPRIT
The path from the mailbox to the refrigerator is not random, but full of careful planning. Data must be collected and linked, customer groups segmented, and designs created. The technical prerequisites are a marketing cloud or a CDP system, and Direct Mail Automation software that is integrated into it.
At the fashion house ESPRIT, they know about the relevance of print in the media mix. Around 55-60% of customers cannot be reached with digital advertising, which is why Direct Mail has become an important advertising channel. “Leaving these customers out would be scandalous,” says ESPRIT’s Saskia Lewandowski in a podcast with our founder and CEO Martin Twellmeyer. With a fully automated and personalized birthday mailing, ESPRIT has managed to harness the refrigerator effect for itself.
Automated birthday campaign
This is a Direct Mail that selected customers receive in the mail shortly before their birthday. It is sent in a classic envelope with a window that gives a hint for a birthday surprise. The direct mail campaign stands out from other advertising formats because, firstly, it attracts attention and, secondly, the customer has to open it first. This significantly reduces the risk of the letter ending up directly in the wastebasket.
Since every customer has a different birthday on a different day, this campaign was designed for full automation. The Direct Mail Automation software is fed in such a way that it automatically triggers the mailing as soon as the birthday is around the corner based on the available data, in this case the birthday, gender, location and address. This not only reduces manual work enormously, but also provides a very personal experience for the customer.
Segmentation of customer groups
The first step to select the relevant customer group was to select customers with a high customer lifetime value (CLV). These are usually existing customers with whom the company has already established a relationship and who are also part of the loyalty programme. Other segments included nationality or location and gender.
Hyper-personalization is important, but in this case it was more important to start with simple segments, such as clusters like CLV and gender, to test the process and identify pitfalls as early as possible. “Standardize first, then personalize,” is how Saskia Lewandowski summarizes the most important learning.
For example, at the beginning it is crucial to keep an eye on data quality, perform data pushes and ensure that data exchange between the individual interfaces works smoothly. Once initial test runs have been successful, then further personalization can take place.
Omni-Channel-Setup
The refrigerator effect also involves creating omni-channel incentives. In other words, linking the direct mail with other channels to make it as easy as possible for the customer. In the case of a birthday campaign, it is of course quite obvious to allow the coupon to be redeemed both online and offline.
In addition, the Direct Mail was used to promote the ESPRIT app via a QR code. Customers who can also be reached digitally by the company received a reminder by e-mail after receiving the direct mail. This reveals a major strength of Direct Mail campaigns: the conversion gap. There can be up to 60 days between receipt of the direct mail and conversion, whereas e-mails lose their relevance after 2 days and are very unlikely to lead to any conversion.
The Birthday Case is the first step towards fully automated journeys and true omni-channel.
Saskia Lewandowski
Campaign Managerin, Team Global CRM, Esprit
And what’s in it for you?
As a rule, Direct Mail campaigns achieve the best conversion rates in the media mix at 4-10%. Due to the higher relevance of direct mails for the customer, companies achieve a noticeable response uplift of 10-50%. In addition, with the introduction of Direct Mail Automation software, companies can reduce their manual effort by 30-80%.
Reading tip: Programmatic Print Study 2021
And how did ESPRIT’s automated birthday campaign go? Listen to the whole success story in the Ein-Mail–Eins podcast. You’ll find out what response rates ESPRIT achieved, what lessons the company learned, and whether the campaign will be continued (German only).
Ein-Mail-Eins – Der Print-Mailing Podcast:
“Episode #010 – So funktioniert das Print-Mailing in der Marketing Automation – mit Saskia Lewandowski, Esprit, und Martin Twellmeyer, optilyz”
